First-Time Buyers and Investors are Winners in Today’s Real Estate Market

Foreclosures are still on the rise in the valley, with no let-up in sight. Just this week I heard from a former business colleague looking to prevent a foreclosure on his credit report. Lee owns a condo in northeast Mesa. It’s becoming more and more prevalent for a friend, family member, or co-worker to experience going into default with their mortgage loan.

The news represents a glimmer of hope for first-time buyers, who for the first time in years can afford to purchase based on low prices and interest rates, with the median sales price last month being $145,000, and investors, who are starting to buy homes that they can now cash flow monthly, or at a minimum get very close to cash flowing.

The market sales this year will certainly outpace last year’s sales in terms of volume based on values being down around 30%, and prices have a little more downward movement left, but it most likely will be bottoming out towards the summertime.

As long as foreclosure rates climb recovery of the housing market will be delayed, because banks are trying to unload their inventory at generous prices to buyers, as they are not in the business of managing and holding homes. There is another wave of foreclosures expected to hit, as more and more adjustable-rate mortgages come due, and more people are experiencing job insecurities.

As a result more lenders are starting to work with their borrowers with loan modification, or resetting terms that are more favorable to the homeowner, allowing them to make timely payments.

What is helpful to the recovery is the fact that building permits are down, which means that for the most part builders have stopped adding inventory to the already saturated market.

Although the job market is challenging right now, the long term job prospects are phenomenal. It is projected that Phoenix’s key industries will get help from federal spending on infrastructure projects and the housing bailout.

Creating jobs will be the engine behind population growth and housing numbers.

Matthew Coates is a real estate consultant with West USA Realty Revelation. He helps those desiring to own a piece of the American dream of home ownership realize that dream.  He can be reached by phone at 602.332.3321 or email: matthew@westusa.com.  Visit his Real estate blog at http://azreconsultantmatthew.blogspot.com.

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